A Code for Sports Governance

It is now widely accepted that having an effective diverse Board is important to the success of an organisation, and this Code accordingly places emphasis on Boards, starting with the requirement that the Board of the organisation has appropriate authority: Directors are collectively responsible and accountable for the long-term success of an organisation and, as such, it is important and appropriate that ultimate authority rests with the Board.

Members of the organisation (i.e. the legal members – in the case of a company limited by guarantee, for example, this means the members of the company whose names are entered into the company’s register of members) also have an important role to play in governance, and the requirement that the Board has ultimate authority does not override or supersede the powers of such members under law.

To help ensure responsibilities are clear, it is recommended a Matters Reserved for the Board document be established and approved by the Board, setting out what topics ultimately sit with the Board for decision. Typically this would include areas such as:

• approval of the organisation’s strategy (Requirement 1.1(b))
• approval of the long-term financial plan and annual budget (Requirement 5.6)
• monitoring delivery of the strategic plan and objectives
• periodic review of the financial plan and performance against annual budget (Requirement 5.6) 
• periodic review of major risks (Requirement 5.7) 
• approval and review of the organisation’s Diversity and Inclusion Action Plan (Requirement 2.2) 
• discussion of, and engagement with, stakeholder proposals and concerns (Requirement 3.3); and 
• a process to identify areas where the Board may be assisted by further education and training. 

It is expected the Board will discuss each of the above at least annually (and more frequently if necessary).

The organisation may also find it helpful to set out clearly any responsibilities or powers that rest with members or related bodies (e.g. the Council) if these exist, while bearing in mind that ultimate power must rest with the Board.

It is also recommended that a Scheme of Delegation document is agreed by the Board. In practise the Board may delegate some of its responsibilities (covering financial and non-financial obligations) to Committees or other groups. A Scheme of Delegation helps clarify what has been delegated, the scope of the delegation, and which elements the Board has chosen to reserve for its attention only (also known as Matters Reserved for the Board). Requirement 1.15 discusses Committees in more detail.

This Code defines a stakeholder as ‘any person or group who has an interest in the organisation or is affected by its actions’.

Best practice suggests that most Boards should set a rolling strategy of at least four years for the organisation which outlines its key long-term objectives and the strategies being implemented to achieve them.

From this, an annual business/operational plan is developed by the executive or management team, which outlines the key tasks to be undertaken to contribute to the achievement of the strategic objectives. The Board may also wish to set key performance indicators to monitor the achievement of the strategic plan and business/operational plan objectives, with responsibility for achievement of the objectives, tasks and key performance indicators allocated to specific Committees, employees or volunteers.

The responsibility to set the strategy also extends to keeping it under review, and it is recommended the Board reviews it at least annually.

Some organisations may only have a small number of staff and perhaps one or two senior executive positions. In this case it is still important to ensure, as far as possible, there is separation between the operational responsibilities of staff and the strategic role of the Board. 

To enable the Board and the executive to perform their respective functions effectively, it is important the responsibilities of each are clear and understood by Directors, senior executives and others within the organisation. Documents such as the Matters Reserved for the Board and Scheme of Delegation (see commentary for Requirement 1.1 (A) above), as well as the ‘Board terms of reference’, can help ensure these responsibilities are defined clearly. 

The Scheme of Delegation and Matters Reserved for the Board are particularly important in those organisations with no executive capacity, where Board members take up executive functions. In those instances, it should be made clear which decisions and actions are reserved for the Board (i.e. decisions to be made formally by the Board as a whole) and which actions are delegated to individuals to complete in an executive and operational capacity. 

To support transparency, Boards may wish to consider the extent (if any) to which Directors or members of the Council (if applicable) are able to liaise directly with the executive outside of the formal procedures, and whether any such communication should be reported to the Board for their record and information. It may be helpful to capture this in relevant documents.

Term limits also enable a Board to recruit the right skills at the right time to suit the strategic objectives of the organisation and consider afresh what diversity of lived experience and knowledge it needs when terms finish. In a broader sense, term limits can also enlarge the group of people who promote the organisation, as former Directors leave but continue to speak positively about the organisation. 

The term limits applicable to a Board will usually be stated in the organisation’s Articles of Association or other similar constitutional document. 

The term limits required by this Code apply to all current Directors, i.e. their terms of office to date should be included in the calculation of their maximum term. If an organisation has incorporated, restructured or merged, then service before this change should be included when calculating time served.

For the avoidance of doubt, if someone is appointed onto the Board directly as Chair without any previous service on that Board, the term limits in Requirement 1.6 apply. If that individual is subsequently appointed to a senior position within an international federation, exception 1.7 (a)ii could be applied. 

A ‘senior’ position with their sport’s international (world) federation means: 

• the presidency 
• membership of the Board or Executive Committee 
• membership of the Council. 

If an individual holds a senior position with an international federation, they may need to be directly connected with the leadership of the sport at a national level, to ensure they have up-to-date insight and knowledge to inform their international work. There are several ways to manage this:

• they may serve on the Board (for a maximum of 12 years); or 
• they may be appointed to an honorary position, and/or attend Board meetings (or parts of Board meetings) as an observer (i.e. not as a Director, and on a non-voting basis); and/or 
• the organisation may establish an international relations management group so that international post holders can discuss matters with Directors and executives of the organisation. 

Exception (b) 

This is in line with Requirement 1.5 and the definition of ‘Ex Officio’.

Exception (c)

As noted at Requirement 1.2, the size of the Board should be sufficient to handle changes to its composition. In addition, Requirement 2.7 requires succession plans for orderly appointments to the Board. However, where it would make sense to retain an individual beyond their normal term of office, and they are willing to do this, the Board may decide to extend their term for a further year. The expectation is that the rationale would be clear and it would only be done on an exceptional basis (e.g. because of unforeseen succession planning issues or because an individual brings a particular skill that is needed at that time). UK Sport/Sport England would expect to be consulted in advance on any proposal to extend a Director’s term under this exception.

Organisations may wish to set a longer period or prohibit Directors from being eligible to stand again if they consider this appropriate. Whichever the preference, a maximum term is nine or fewer continuous years’ service (as per Requirement 1.6), after which at least four continuous years must be spent off the Board before being eligible to return to the Board. Any period off the Board of fewer than four continuous years will count as service on the Board, when calculating the maximum term served.

They enhance decision-making by providing objective scrutiny and offering an independent perspective, drawing on their current and previous experience from outside of the organisation as well as bringing diverse skills and knowledge. Having an element of independence in an organisation’s governance structure often enhances the reputation of the organisation and makes it a more favourable proposition to potential partners, investors or sponsors. 

In some organisations, all or the majority of the Board is independent, and for others there may be good reasons for not adopting this model. Given the value independence brings, Boards with or just exceeding the minimum 25% are encouraged, as good practice, to review periodically, and consider with serious intent, whether this percentage should be increased for their organisation. 

To perform effectively, Independent Non-Executive Directors need to receive a good induction (Requirement 2.12), have access to the right information at the right time, and have the confidence and space within the boardroom to offer constructive challenge. In return, Independent Non-Executive Directors need to ensure they are able to commit sufficient time to their role and to understanding the business of the organisation. 

To preserve the value deemed from having an element of independent challenge in the decision-making process, organisations may want to consider if a quorum of the Board should include a certain number of Independent Directors. 

If 25% is not a whole number, then this should be rounded up for the purposes of calculating the required number of Independent Non-Executive Directors. 

For the avoidance of doubt, a Nominated Director is not considered independent for the purposes of this Code.

There are a number of ways an organisation can appoint its SID. First and foremost, as the SID is an Independent Non-Executive Director they must be appointed to that role through an open, publicly advertised and accessible recruitment process (Requirement 2.6) and must meet the Code’s definition of ‘independent’ upon their appointment. 

An organisation’s Articles of Association may specify the process for appointing the SID, but in most cases the appointment requires only a majority vote by the Board of Directors (excluding any candidates for the role of SID). The Nominations Committee may also play a part, taking responsibility for identifying willing candidates once a vacancy becomes apparent, and making a recommendation to the Board. 

It may be that there are no willing candidates from within the Board, or that none of the potential candidates are considered suitable for the role. If this is the case, a new Independent Director would need to be recruited to join the Board and take on the role of SID. It is important to remember that as well as recruiting someone with the skills and experience to be the SID, the recruitment should consider the broader skills, diversity and experience needed by the Board (Requirement 2.4), the maximum number of Directors permitted to be on the Board (Requirement 1.9) and the recruitment processes required for Independent Directors (Requirement 2.6). 

In circumstances where the recruitment process is expected to take some time, and none of the existing Independent Directors wish to step in for the interim period, the Board may wish to consider co-opting someone independent to act as SID until a permanent replacement is appointed (Requirement 2.5).

It is for the Board to determine the composition of the Committee but best practice suggests this should be comprised of at least two, and preferably three, Independent Non-Executive Directors, with at least one member of the Committee having recent and relevant financial experience and one member with risk expertise who can bring knowledge of effective risk management and internal control. The Committee should be chaired by an Independent Non-Executive Director, and the Chair of the Board should not ordinarily be a member of the Committee. 

The Audit Committee is usually responsible for making a recommendation on the appointment, reappointment and removal of the external auditors and would meet the external and internal auditors at least annually, without management, to discuss matters relating to its remit and any issues arising from the audits.

For Board appointments, this includes evaluating the Board’s current capability against the agreed skills matrix, and, in light of this evaluation, agreeing a description of the role and capabilities required for a particular appointment. See also Requirement 1.10 (skills matrix).

Having a majority of Independent Non-Executive Directors on the Committee provides assurance to the Board and stakeholders (including interested candidates) that the appointment process benefits from independent and objective scrutiny. The size of the Nominations Committee is for the organisation to determine but in practice many organisations find a Nominations Committee of three is appropriate. Good practice suggests an Independent Non-Executive Director as Chair of the Committee, with the Chair of the Board an ordinary member. It is for the organisation to decide who chairs the Committee, other than in the circumstances set out in part (b) of this Requirement where an Independent Non-Executive Director is required to be Chair. 

If circumstances mean an organisation is not able to establish a Nominations Committee with a majority of Independent Directors from the Board (e.g. because of vacancies on the Board), the organisation can look to external individuals to bring independence. The key aim being to preserve the principle of independent thought. 

Given the role the Nominations Committee plays in the appointment process it is important to ensure the Committee is diverse and inclusive.

Terms of reference for Board Committees should set out clearly which responsibilities the Board has agreed to delegate and the reasons for this, ensuring the scope of Committee authority is clear. Committee terms of reference should be agreed by the Board. As well as formal responsibilities, best practice suggests terms of reference should also include details about the administration of the Committee, for example:

• Committee membership 
• frequency of meetings 
• how decisions are recorded and reported to the Board 
• how many Committee members should be present for a decision to be made (i.e. the quorum); and 
• whether the Committee can meet and decide matters virtually. 

As with Boards, the most successful Committees are widely accepted to be those which draw on a range of viewpoints and skills to support delivery of the Committee’s role, and which foster an inclusive culture where all voices are heard and valued, and difference of opinion is respected. To reinforce this, the organisation may wish to reference conduct, behaviours and values in Committee terms of reference or point to other documents such as the Code of Conduct (Requirement 4.4). For Nominations Committees and related interview panels in particular, organisations may also want to consider whether additional training would be helpful to support members in better fulfilling their roles and ensuring an inclusive approach to the recruitment process. 

As well as sharing minutes from Committee meetings, it is important the Chair of each Committee has an appropriate reporting mechanism to the Board to ensure Directors are aware of key decisions made under delegated authority. This might be, for example, through a written report or a formal verbal update to the Board. Committee chairs may also meet as a group with, or discuss matters directly with, the Chair of the Board. They may also meet with Chairs of similar Committees from other organisations to share best practice and discuss latest developments in their field. 

As per Requirement 4.2(c), undertaking a Committee evaluation provides another opportunity for the Committee to report to Board, noting how it has discharged the responsibilities which have been delegated to it. 

The terms of reference for each Committee should be kept under regular review in line with the organisation’s Board documents and policy review schedule and may be made available on the organisation’s website in the interests of transparency. 

It is good practice to ensure any new member joining a Committee is provided with a copy of its terms of reference and receives an induction in relation to the Committee.

Generally, delegation to Committees does not detract from the Board’s collective responsibility for delegated issues but can help significantly with the Board’s management of them. 

Beyond the work of the Audit and Nominations Committees, Boards often delegate consideration of the following governance-related issues to Committees: 

• Risk management and internal control 
• Remuneration 
• Ethics and compliance 
• Performance and athletes 
• Diversity and inclusion 
•  Environmental social governance or sustainability. 

Sometimes these issues are part of the work of the Audit (e.g. risk management and internal control) or Nominations (e.g. remuneration) Committees; sometimes separate Committees are established. Whether and how to delegate consideration of the above matters is for the Board to determine. 

In addition, the nature of sport National Governing Bodies is such that their Boards sometimes constitute Committees to give detailed and expert consideration of sport-specific issues (e.g. performance management and athlete welfare). 

Committee appointments from outside the Board 

As well as Directors, a Committee may include individuals from within or outside of the organisation if the Board considers this appropriate. Recruiting individuals to serve on Committees can bring specialist skills, diverse experience and perspective and act as a development opportunity, giving valuable experience to individuals who may in the future wish to pursue becoming Directors. It is recommended that the basis for any Committee appointments outside of the Board is clear and focused on bringing particular skills or perspectives. Where appointments are to be made from outside the organisation (e.g. recruitment of technical specialists to Audit or Nominations Committees), it is recommended they are publicly advertised. 

When recruiting from within or outside of the organisation, it is important to ensure any candidates are provided with sufficient information to ensure they understand what would be expected of them in the role. This would include documents such as the Committee terms of reference, information about expected time commitment and any recompense (e.g. expenses), and any relevant codes of conduct.

The value of drawing on different perspectives and voices in decision-making cannot be underestimated. 

This Code requires organisations to be ambitious in achieving greater diversity in all its forms, not only on their Boards, but also on their Senior Leadership Teams, as well as the wider workforce and membership. Discussions around the organisation’s ambitions should include and go beyond the nine protected characteristics in the Equality Act 2010*, including how to recruit, retain and develop people with different lived, regional and socio-economic experiences. Representation from a wider cross-section of society will encourage more people to believe that they belong, and can participate and engage fully and equally in sport and physical activity. Creating an environment where effective decisions are taken by welcoming, including and harnessing different perspectives is key to achieving these requirements. 

*The nine protected characteristics of the Equality Act 2010 are sex, age, disability, gender reassignment, race, sexual orientation, religion or belief, marriage and civil partnership, and pregnancy and maternity. 

Ambitions for increasing diversity and inclusion should be informed by organisational data, priorities and individual contexts, while also taking into account wider sector and societal impact. The approach used to achieve these aims should be shaped by a commitment to recognise the importance of lived experience and the diversity of an individual’s identity. This approach is based on the premise and understanding that a variety of factors can influence an individual’s ability to participate in sport and aims to ensure everyone has a real chance to get involved in the activities of their choice. 

When setting their ambitions, Boards should consider a range of factors and any legal obligations in this area. This includes but is not limited to gender, race and ethnicity, disability, LGBTQ+ and socio-economic and regional equality, thus reflecting the diversity of wider society. Organisations should also seek to recruit and retain individuals with diverse upbringings, education, wealth, social status and professional backgrounds. In each case, organisations should take action to identify and remove any barriers to representation and inclusion.

Sport England and UK Sport are committed to supporting partners to meet the Requirements in this area.

The DIAP is a tool to help Boards set out, publish and regularly review their ambitions and actions for achieving greater diversity and embedding inclusion in the Board, Senior Leadership Team and wider organisation and membership (in line with Requirement 4.1). 

Further information will be provided about the development of DIAPs and support available, but the following provides some initial guidance. 

Each organisation will determine the actions necessary to support and maintain the ambitions in 2.1. In doing so, organisations should actively review and challenge their existing practices, barriers and biases in their recruitment and capacity-building; and consider how they will improve diverse representation, including by working with new partners and allies. Organisations should also address the diversity of formal structures other than the Board and Senior Leadership Team, in order to promote and embed diversity at all levels within the organisation and build internal capacity for future succession planning and growth. 

The Board should take responsibility for this process and monitor progress against the actions, in particular reviewing the progress update on at least an annual basis and discussing the plan for the following year before this information is published. Regular gathering of diversity data of Board and workforce composition will be key to ensure progress is tracked and measured, and relevant priorities and actions are appropriately identified. 

For transparency, and to ensure accountability for delivery, it is essential the DIAP is public and accessible through the organisation’s website. Annual reviews, as a minimum, will maintain the DIAP’s relevance and record progress the organisation has achieved against its ambitions and actions in respect of diversity. 

Annual reporting could include details of the following as a minimum: 

• diversity breakdown of leaders, staff, volunteers and participants 
• policies and procedures related to equality, diversity and inclusion 
• what recruitment practices have been adopted to improve diversity and ensure an inclusive approach 
• who has specific remit within the organisation for providing strategic leadership on equality, diversity and inclusion 
• any activities or programmes undertaken (e.g. shadowing and mentoring schemes) to encourage future leaders from particular communities. 

All DIAPs will need to be agreed with Sport England and UK Sport, who will provide guidance and support to organisations to meet and build on these diversity requirements, including the development and implementation of their DIAPs. Sport England and UK Sport will also challenge whether organisations are being ambitious and/or taking all appropriate actions to drive diversity on their Boards and wider organisations. 

Requirements 2.1 to 2.3 should complement any obligations placed on funded organisations by the terms of the funding agreements of Sport England and UK Sport regarding equality e.g. to comply with the Equality Standard for Sport (published by UK Sport, Sport England and the other Home Country Sports Councils).

Organisations are also encouraged to consider how they can support UK Sport’s and Sport England’s respective strategies to drive greater diversity in the sector, for instance the commitments made following the Tackling Racism and Racial Inequality in Sport review carried out in partnership with the other Home Country Sports Councils. These are available on the UK Sport and Sport England websites.

It will be for an organisation to determine the form of this statement but it may include reference to: 

• the responsibilities set out in the Board’s terms of reference 
• the legal duties placed on Directors by legislation, including the requirement they act in the best interests of the organisation as a whole (rather than a particular group or constituency) 
• their duty to support and uphold the principles of the Board’s commitment to areas such as equality, diversity, and inclusion and welfare and safety 
• expectations about conduct (in line with the Directors’ Code of Conduct at Requirement 4.4); and 
• any responsibilities specific to their particular role on the Board (e.g. Senior Independent Director; Board lead for safety and welfare (Requirement 4.7). 

It is good practice to review the statements periodically to ensure they remain up to date. UK Sport and/or Sport England can provide guidance and examples for the content of these statements. 

Sharing the written statement of responsibilities also provides a great opportunity for new Directors to be presented with and asked to sign the Directors’ Code of Conduct (Requirement 4.4).

The objective of an induction process is to ensure all new Directors have the information they need to become as effective as possible, as soon as possible. A good induction process should help build an understanding of the organisation and its main relationships and establish links with the key people within the organisation. The induction may be tailored in recognition of the different needs, skills and experience of each Director but there is likely to be a baseline of common information shared with all. Organisations may also find it helpful to think about using different methods for the induction process (e.g. one-to-one and online meetings, attendance at events, information packs, and visits) and to consider the specific training needs of the new Director. Topics that may be covered in an induction include the following: 

• The role of a Board and the duties of a Director (in line with the written statement of responsibilities at Requirement 2.11 and the mandatory Code of Conduct at Requirement 4.4) 
• The organisation’s history and structure 
• The organisation’s values, principles and culture 
• The organisation’s governing documents (e.g. articles, schedule of reserved matters, Board and Committee terms of reference, recent Board and general meeting minutes), strategic plan, financial information, Diversity and Inclusion Action Plan, and significant issues 
• The organisation’s key stakeholders (it may be appropriate to facilitate meetings with such stakeholders, e.g. staff, athletes’ or members’ representatives, investors etc.) 
• Key organisational policies, including those related to welfare and safety, integrity and equality, diversity and inclusion 
• This Code 
• Training on specific issues such as safeguarding (children/adults) and equality, diversity and inclusion. 

Careful consideration should be given to the amount of time needed for a proper induction, and whether it should be staggered to promote incremental learning and avoid an immediate over-burdening with too much information. This could be discussed with a new Director, also giving them an opportunity to contribute to the process by outlining any specific elements they would like included; for example, a newly-appointed Director who is taking a position on a Board Committee may want to spend more time with those who are responsible for matters that come before that Committee. 

Organisations may wish to consider pairing a newly-appointed Nominated Director with an Independent Non-Executive Director, and vice versa, in order that each can learn from the other: Nominated Directors often have unrivalled knowledge of the sport, and Independent Directors often bring experience from senior levels of the wider business community. 

Consideration should be given to how Directors confirm their successful completion of the induction process, and how the organisation gathers feedback from Directors who have undergone the process to support its continuous development.

Transparent, clear and honest communication is essential to leading and representing others successfully and helps to build trust, particularly where stakeholders have an active interest in the activities of the organisation. 

It is worth remembering that organisations subject to this Code are in receipt of public funds, meaning the general public should also be considered stakeholders. Ensuring informative, disclosable information is available on the public facing parts of an organisation’s website, in a manner which is easily accessible and navigable, is therefore a good place to start. Accessibility (making sure a website or mobile app can be used by as many people as possible) is important and for some (primarily public funded organisations) is a legal requirement. Organisations should think about this when sharing information (the Government offers some guidance for public bodies on understanding accessibility requirements, which may be helpful). 

This Code recognises a balance must be achieved between ensuring disclosed information is meaningful, while not creating an undue burden on the organisation, or indeed overloading stakeholders with documentation. Organisations should therefore think about the purpose and reason for disclosing information and, in line with accessibility requirements, ensure any information shared publicly is done so in a way which means it can be easily located and understood by stakeholders. 

The overall aim is that sufficient information must be disclosed to enable stakeholders to have a good understanding of the organisation’s governance, structure, strategy, activities and financial position. It is recognised and indeed expected that this increased emphasis on transparency may require organisations to disclose information about where they need to improve, but organisations are also encouraged to publicise and celebrate their governance progress and achievements. It is for the organisation to think about what information it will disclose, and the style and tone of disclosure but this Code expects that, as a minimum, these areas would be covered: 

• annual update on governance (see below) 
• organisation’s strategy 
• main activities over the past reporting year (which may be captured in the annual report) 
• accounts (Requirement 5.5) 
• progress on diversity and inclusion (Requirement 2.2) 
• biographies of Board members, indicating any particular roles on the Board or Committees (e.g. Board or Committee chair, Senior Independent Director, member of a Committee, Welfare and Safety lead Director). 

As well as historic and static information and publication of annual updates required by this Code (e.g. Requirement 2.2), organisations are strongly encouraged to think about what other dynamic information can be shared openly (e.g. current decision-making, any changes to strategic/business plans, latest organisational performance or diversity data). 

Suggestions for information an organisation may reasonably be expected to publish include: 

Governance 

• A summary of any significant governance actions or changes over the preceding year. Examples could include changes to the articles, Board or Council; strategy development work; work undertaken to evaluate the effectiveness of the Board, Council or internal processes; stakeholder engagement work; any key decisions taken by the Board 
• An overview summary of whether the organisation complies with this Code. This could include a self-assessment, and/or a report on any external audit or assurance process that has taken place, as well as confirmation of actions completed to maintain compliance, e.g. Board Evaluation or policy reviews 
• Details of any areas of non-compliance, and how the organisation proposes to address them. It is important to note that if an organisation is working towards compliance with a requirement but has not yet reached the time for compliance agreed with UK Sport/Sport England, then this is not non-compliance with this Code. The organisation may nevertheless wish to give an update on the work that it is doing on this particular issue 
• Director attendance at Board and Committee meetings. 

Structure 

Structural information is likely to be ‘standing’ information that, although kept under review, will generally only need updating when changes have been made. This might include: 

• Constitutional documents (e.g. Articles of Association or similar) 
• Terms of reference of the Board and its Committees or any other key groups. 

Strategy and key decisions 

The Board is responsible for setting the organisation’s strategy (Requirement 1.1(b)). Once agreed, the strategy should be published, with the Board reporting regularly on progress against it and key strategic decisions made in the reporting period. 

Boards are encouraged to publish a summary of other key decisions made during the reporting period – i.e. those which have a significant impact or effect on the organisation, its management or its stakeholders. 

Boards are also encouraged to publish minutes (or a summary report) of Board and Committee discussions on a regular basis. 

Activities 

Many organisations publish an annual review of the activities of the organisation. From a governance perspective, this review could include reports on the workings of the Board (as referred to in Requirement 1.14), its Council (if the organisation has one) and key Committees. 

Financial position 

Requirement 5.5 requires audited annual accounts to be published. 

Organisations may choose to publish other financial information throughout the year to provide stakeholders with more dynamic information on the financial position (e.g. quarterly financial reports, grants provided, sponsorship gained). 

Corporate social responsibility or environmental social governance 

Corporate social responsibility (CSR) or environmental social governance (ESR) is about the impact an organisation makes on society, the environment and the economy. Having effective CSR/ESG programmes contributes positively to all stakeholders as well as adding value to the organisation itself, and ensures it operates in a sustainable way.

Revisions to this Code in 2021 now require the Board to ensure it factors environmental social governance into the decisions it takes and the actions it implements (Requirement 5.2). Stakeholders are increasingly interested in an organisation’s approach in this area and organisations are encouraged to think about what information they can share in this respect (e.g. any organisational policies related to sustainability, actions taken and/or performance delivered, partnerships formed to support sustainable practices). 

Certain commercial companies and financial services firms have legal obligations to publish information in this area. Further information can be found on the government website and may act as a helpful prompt for organisations, even if they are not subject to the legal reporting requirements. 

Diversity 

This Code sets out specific transparency expectations with respect to diversity which includes publishing a clear statement of intent about the organisation’s commitment to diverse leadership, the organisation’s Diversity and Inclusion Action Plan and an annual update (Requirements 2.1 to 2.3). 

The Diversity and Inclusion Action Plan (DIAP) itself will likely include commitments to publishing information and data with respect to diversity. That will be discussed as part of agreement of DIAPs but may include areas such as: 

• Diversity breakdown of leaders, staff, volunteers and participants 
• Policies and procedures related to equality, diversity and inclusion 
• What recruitment practices have been adopted to improve diversity and ensure an inclusive approach 
• Who has specific remit within the organisation for providing strategic leadership on equality, diversity and inclusion 
• Any activities or programmes undertaken (e.g. shadowing and mentoring schemes) to encourage future leaders from particular communities. 

Welfare and safety 

Stakeholders want to be assured they will be safe and looked after when interacting with the organisation or participating in the activities it is responsible for. Publishing information related to welfare and safety is therefore key to gaining stakeholder trust and may include as standard: 

• Any welfare and safety policies and procedures, making sure these are accessible and clear to anyone who may need to use them 
• Safeguarding aims and objectives for the organisation 
• Relevant training records for staff, safeguarding leads and volunteers 
• Information about how to raise any issues or concerns with respect to welfare and safety and how these will be managed. 

Other

The information above acts as a guide only on what stakeholders may reasonably expect to be published. Organisations may of course choose to share more information. 

This Code does not expect organisations to disclose information which is confidential or has commercial or sporting sensitivity and all information should be disclosed in line with relevant legislation and regulations (e.g. General Data Protection Regulation).

Information published should, ideally, include what individual Directors are entitled to be paid and what they receive each year. 

In terms of Requirement 3.2 (b) it is for the organisation to determine who is captured under the term ‘senior management team’. 

The expectation is that this information would be published annually. Some organisations choose to do this in their annual report. 

This Requirement represents the minimum expectation in terms of disclosure and organisations may of course choose to publish additional information (e.g. details of any gifts and/or hospitality received by Directors).

A stakeholder is any person or group (internally or externally) which has an interest in the organisation or is affected by its actions (e.g. general public, those accessing the organisation’s services, employees, volunteers, coaches, teams, athletes, members, associated organisations and their members, suppliers, Home Country Sports Councils, investors etc.). 

The stakeholder landscape of an organisation is likely to be complex, and one model will not suit all. For example, some organisations may have members with a formal engagement role and hundreds of employees whereas others may have no members and few employees but many volunteers and an engaged base of participants. It is incumbent on each organisation to consider properly who its stakeholders are and how it should best engage with them, giving due regard to equality, diversity and inclusion (e.g. hearing the voices of young people in services aimed at them is now considered fundamental to best practice). Accessibility and effective communication are crucial if an organisation wants to develop and deliver a successful stakeholder engagement strategy. 

The Board should play an active role in reviewing, not only the development of the stakeholder engagement strategy, but also how effectively it is being delivered. The strategy should align with organisational priorities and objectives and draw on existing methods of engagement as well as identifying any new opportunities to listen and gather information about topics important to the organisation and its stakeholders. 

From a diversity and inclusion perspective, organisations are also encouraged to think about cultivating ally relationships with other organisations and groups that can actively support, champion and challenge the ambitions set out in their Diversity and Inclusion Action Plans (Requirement 2.2), and improve the participation of under-represented groups. 

It is for organisations to consider how best to develop, deliver and report on engagement with their stakeholders, but the following outlines expectations regarding two groups of stakeholders specific to the sports sector: 

Elite athletes 

Sport National Governing Bodies with elite athletes should ensure there are suitable mechanisms to capture and reflect their views in relevant decisions. 

The means by which this is achieved may depend on the circumstances of the National Governing Body, but suggestions include: 

• Where it exists, working with an established union for professional players in that sport 
• Establishing a formal route for consultation (e.g. via an athlete advisory Committee, forum or athlete representatives which enable athlete representations to the Board) 
• Annual athlete survey 
• Athlete focus groups 
• Having a nominated athlete spokesperson (nominated by fellow athletes according to a fair and democratic process and according to a role description established mutually by the organisation and athletes) 
• Establishing an athletes’ commission in conjunction with the British Athletes Commission 
• Having an athlete representative on the Board (although the requirements of this Code regarding the maximum size of Boards and the need for skills-based recruitment of all Directors should be borne in mind). 

Home countries/UK organisations

It is essential UK or GB National Governing Bodies and their equivalents in any or each of the home countries, develop good relationships to ensure harmonious management and guardianship of the sport as a whole. It is in the best interests of all to engage and work effectively together by coalescing around a collective strategic vision for the sport, encouraging a culture of connectivity and partnership.

Sport England and UK Sport expect organisations they invest in to demonstrate a duty of care towards everyone involved in their work including coaches, staff, elite athletes (where appropriate), and people taking part whether paid or unpaid. 

A People Plan is a core business and proactive process essential to ensuring the work of the organisation is delivered, supported and led by a diverse range of people who are equipped and supported to meet the demands of their role and the changing needs of the people and communities they interact with. 

The People Plan should be aligned to the needs and goals of the organisation for the year(s) ahead, contributing to the long-term success of the organisation by ensuring the systems, policies and processes in place to support people are attuned to people’s needs and aligned with the organisation’s strategic objectives. 

The expectation is that the People Plan is reviewed and discussed annually and the findings are shared openly. Involving people (e.g. staff, coaches, elite athletes (where appropriate), volunteers and others) in the development and ongoing delivery of the plan helps an organisation keep the plan current and ensure a diverse range of perspectives is represented, informing continuous improvement in areas such as recruitment and training. 

Each organisation is different and will need to develop a People Plan that best suits its needs, but the essential purpose remains the same – ensuring the skills and experience of the people within an organisation are organised and deployed to greatest effect.

This Requirement covers three tiers of evaluation: the Board as a whole; the Committees of the Board; and individual Directors and the CEO (or equivalent). 

Internal evaluation of the Board 

The areas to be covered in the annual Board evaluation will depend on factors specific to the organisation, e.g. its purpose, size, and particular challenges it is facing. However, it is broadly expected that it will cover the following areas: 

• the balance of skills, experience, independence and knowledge of the Directors on the Board (in doing so, the Board should refer to and update the skills matrix) 
• its diversity and any elements related to ambitions in the organisation’s Diversity and Inclusion Action Plan (Requirements 2.1 to 2.3) 
• the quality of relationships and behaviours between Board members 
• a reflection on and review of the quality and timeliness of information provided to the Board and how this has affected and/or influenced their decision-making 
• the effectiveness of the Board meetings and of Board decision-making 
• the success of the Board in implementing the organisational values and promoting a positive and inclusive culture; and 
• any other factors relevant to its effectiveness. 

The above list is not exhaustive. 

The Board is not expected to conduct an internal evaluation in the same year an external evaluation is undertaken (Requirement 4.3). 

Board evaluations are only worthwhile if the issues identified are addressed and followed up. Following an evaluation, the Chair should lead the Board to act on its results by recognising the strengths and addressing the Board’s weaknesses or areas for development. This could include, where appropriate, proposing new members be appointed to the Board or seeking the resignation of Directors. 

To support this, the Board should seek to establish an action plan which captures any actions or recommendations arising from the evaluation. The progress against this action plan should be regularly reviewed in the period between evaluations. 

Evaluation of individual Directors and CEO (or equivalent) 

The purpose of individual evaluation is to determine whether each Director continues to contribute effectively and demonstrate commitment to the role of a Director. An effective appraisal will enable Board members to evaluate their performance, receive constructive feedback, build upon strengths and address any areas for development. This process should normally be led by the Chair of the Board. The Senior Independent Director, with support from other Directors, should lead the performance evaluation of the Chair. The process should be documented. It may be appropriate to agree individual development plans as a result of these evaluations, though these should not be published. 

The organisation should ensure Directors continually update their skills, knowledge and familiarity with the organisation to fulfil their role effectively and should provide them with the necessary resources to do so. 

It would be appropriate for individual Director appraisals to be undertaken annually, regardless of whether the Board was undertaking an internal or external evaluation. 

The Chair should also lead the annual appraisal of the organisation’s CEO or equivalent. It would be expected that this appraisal is linked to the performance of the organisation against established key performance indicators (KPIs). It would also be an opportunity for the CEO (or equivalent) to receive timely and balanced feedback to help them understand and meet the Board’s expectations. As with Directors, the process should be documented. 

Evaluation of Board Committees 

The process should usually be led by the Chair of the Committee, reporting to the Chair of the Board. It is for the Board to determine the frequency with which evaluations of Board Committees should take place but Committees may also propose to the Board that a Committee evaluation is undertaken. An annual evaluation is considered best practice but it is recognised that the size of many organisations means resources need to be carefully focused so as to maximise governance performance. An evaluation of a Board Committee provides assurances to the Board in relation to the matters delegated to that Committee and should encompass a review of the effectiveness of the Committee and how it connects to the main Board. It can cover similar areas to those suggested above for Board evaluations. 

Continuing development – governance expertise 

Organisations should consider undertaking activity which will build their governance understanding and knowledge. This is to ensure there is continuous development by organisations as a whole of their governance activity. Relevant activity may include attendance by a Director or senior member of staff at a governance training event run by a recognised expert in the field (e.g. the Sports Governance Academy, the Sport and Recreation Alliance, Sport England, UK Sport, the Institute of Directors, the Chartered Governance Institute, a law firm event, or a private sector conference provider etc.), or by a bespoke training event run for the organisation perhaps in conjunction with other funded organisations in order to promote efficiency).

It helps to build an understanding of the Board’s strengths and weaknesses with regard to its performance as a group, as well as its value to the organisation and stakeholders. External perspective can also be useful in identifying and addressing challenges within the dynamics of the Board which may be impacting on effective decision-making. The external Board evaluation should encompass how effectively the Board has harnessed a diverse range of viewpoints and experience to improve its decision-making.

An external Board evaluation should be facilitated at least every four years, or at the request of UK Sport/Sport England. An external evaluation can replace the annual internal evaluation in that year. 

The Chair of the Board, with support from the Senior Independent Director, should play an important role to ensure that the evaluation provides valuable insight by engaging with the external facilitator/evaluator and providing access to individuals and material necessary for the review. 

Wherever possible, the external facilitator should not have any connection with or be a provider of additional services to the organisation. 

As with the internal evaluation, it is important that the Board develops and implements an action plan to take forward any recommendations from the external evaluation, and that this plan is regularly reviewed to monitor progress.

It is important to consider the legal duty of a Director to avoid a conflict of interest under the Companies Act (or the Charities Act where applicable). Further to this, it is the legal duty of the Director to act in the best interest of the organisation. 

Acting in the best interests of the organisation includes disclosing to the Board (and in the annual report) any other significant commitments that might impede a Director’s ability to participate or make decisions without bias. This obligation is ongoing, and conflicts must be reported if they arise subsequent to appointment. 

As part of maintaining a COI policy, the Board should keep an up-to-date register of interests and it is the responsibility of each individual Director to ensure that their disclosed information is accurate. 

The Board should also ensure that the organisation has a COI policy with similar expectations for executive staff.

The obligation is however ongoing, and Boards should consider how they can keep their understanding of these obligations up to date (e.g. individual Director or collective Board training). 

Directors are not required to have absolute knowledge of all applicable regulations that may apply to the organisation. However, to carry out their roles effectively they should be sufficiently familiar with the applicable regulations to enable them to identify potential issues and, know the appropriate channels to elevate such issues for further investigation. The Board may also wish to ensure it has the ability to access or draw on legal expertise when required. 

Requirement 5.4 outlines some of the legal and regulatory policy areas Directors should consider (although as noted, does not provide an exhaustive list). Directors should also consider if there are any particular policy areas they should be aware of which are specific to their organisation or the activities it conducts.

This might include seeking assurances periodically from the Senior Leadership Team that appropriately qualified staff are employed and have access to relevant information and training to maintain professional competency in financial matters.

Effective policies and procedures, that are understood by the Directors, staff and volunteers will help to ensure effective management of the organisation’s financial and regulatory responsibilities.

Financial policies 

The financial policies should be appropriate for the organisation but would be reasonably expected to include policies covering areas such as: 

• Controls on expenditure – who can spend what and with whose authority 
• Controls on travel and subsistence – when and what can be claimed for travel and subsistence 
• Exercising budgetary control – who can spend how much and on what, and what expenditure needs special permission 
• Banking – how income is banked, who can authorise direct debits and how bank accounts are reconciled 
• Procurement – how an organisation ensures that effective, competitive, inclusive and fair procurement processes are in place; and 
• Reserves – target levels and how these will be monitored. A policy around reserves is an important element of the financial management and forward financial planning and a policy would usually establish the target level of reserves for an organisation to hold. This level will vary from organisation to organisation, and the policy on reserves would set out why a certain level is appropriate for that organisation and therefore why holding these reserves is necessary. 

Legal and regulatory policies 

Organisations are best placed to determine which legal and regulatory obligations are pertinent to them. This could include the following topics (note that this is not an exhaustive list): 

• Anti-doping. All anti-doping queries should be directed to UK Anti-Doping (UKAD). National Governing Bodies of sport need to demonstrate their compliance with UKAD’s assurance framework and, as in the case for the Sports Councils, comply with the obligations set out in the UK’s National Anti-Doping Policy, www.ukad.org.uk/national-anti-doping-policy 
• Bribery and anti-corruption. National Governing Bodies of sport should decide which proportionate and risk-based actions the organisation should take in respect of any threat presented by corrupt sports betting and associated activity. Further information and assistance can be found from the Sports Betting Group, www.sportsbettinggroup.org/code-of-practice 
• Company law 
• Charity law (if applicable) 
• Complaints, grievance and disciplinary 
• Cybersecurity regulations 
• Health and safety 
• Data protection 
• Equalities legislation, including but not limited to, the Equality Act 2010 
•  Employment law 
• Safeguarding legislation for both adults and children. (Note: the funding agreements of Sport England and UK Sport contain specific obligations concerning safeguarding). These require appropriate policies and procedures to be put in place. For safeguarding children, organisations are also required to implement and adhere to the Standards for Safeguarding and Protecting Children in Sport as issued by the NSPCC’s Child Protection in Sport Unit. For safeguarding adults, organisations are required to implement and adhere to the Safeguarding Adults in Sport Framework as issued by the Ann Craft Trust. Full reference should be made to the terms of the funding agreements 
• Whistle-blowing legislation 
• Organisations which are National Governing Bodies of sport should have in place clear, legally compliant athlete grievance and disciplinary policies.

The Board should therefore ensure there are effective communication channels in place to ensure this is happening (e.g. including relevant policies as part of the induction process, making policies readily accessible via an intranet page or including in the staff handbook).

The frequency of review will vary depending on the organisation and the policy in question (i.e. some policies will need more frequent review depending on their subject matter). Boards should satisfy themselves an appropriate policy review schedule is in place and being implemented, and should consider the role of Board Committees, such as the Audit Committee, in the process of policy review.

Some obligations/policies will likely have significant overlap and it is worth taking this into account when reviewing or drafting.

This includes establishing a strategic plan and making judgements about the longer term financial viability and direction of the organisation. The Board should have processes in place to monitor progress against the long-term strategic and financial plans, as well as monitoring the one year budget, cash and financial forecasts and identifying how they will put in place remedial action, if required. 

Many organisations in the sporting sector have relied on public investment to contribute to their ongoing administration costs. Boards should ensure their strategy includes a balanced assessment of ways they might realistically seek alternative sources of funding or could engage with other partners to deliver shared objectives. Examples would include engaging members, the public or private sector on sponsorship opportunities or commercialisation of sporting rights.